Cayman ISLANDS Law and Practice Contributed by: Sam Dawson, Peter Sherwood and Denis Olarou, Carey Olsen
3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct
Where a contingency fee agreement provides that an attorney is entitled to a success fee, the success fee must not exceed more than 100% of the attorney’s normal fees. In addition, in the case of claims sounding in money, the total of any success fee payable by the client to the attorney must not exceed one third (33.3%) of the total amount awarded or any amount obtained by the client as a consequence of the proceedings (excluding costs). Where a contingency fee agreement involves a percentage of the amount or of the value of the property recovered, the amount to be paid to the attorney must not exceed one third (33.3%) of the value of the property (save where a joint application is made to the court. These caps may be varied by joint application to the court, depending on factors such as the nature and complexity of the proceedings, the expense or risk involved or any other relevant factors. The court will not, however, approve any contingency fee exceeding 40% of the total amount awarded, of any amount obtained by the client or of the value of any property recovered. 2.7 Time Limit for Obtaining Third-Party Funding There are no formal time limits. In practice, it is wise to consider the possibility of third-party funding from the outset. However, a third-par- ty funder is unlikely to commit until the case is developed to a stage where a meaningful assessment of merits and prospects of recov- ery can be undertaken. In appropriate cases, some funders will agree to advance “seed capi- tal” required to progress investigations and/or the legal analysis to the point where a meaning- ful assessment of the merits and prospects of recovery can be undertaken.
Save in judicial review proceedings (in respect of which there is a pre-action protocol), the court does not impose any rules of pre-action conduct on the parties. The Grand Court has indicated that pre-action protocols in respect of personal injury, clinical negligence, defamation and repossession proceedings will be published in due course. However, the parties should remember that the court has considerable discretion on the issue of costs and may well take pre-action conduct into consideration. 3.2 Statutes of Limitations Limitation periods are prescribed by statute (Lim- itation Act (1996 Revision)) and vary depending on the nature of the claim. Claims under contract expire six years after the date of breach. Claims under a specialty (including a deed) expire 12 years after the cause of action arises, unless a shorter period of limitation is otherwise applica- ble. Tort claims have a six-year limitation peri- od, which usually commences on the date the damage is incurred. However, for personal injury, libel and slander, the time limit is three years. Actions for sums recoverable under a legislative provision must be started within six years from the date when the sum became due. Claims for recovery of land can be commenced up to 12 years from the date when the right accrued (or 30 years if the claim is against the Crown). In certain circumstances, limitation periods can be extended or abrogated altogether. For exam- ple, if the right of action has been deliberately concealed from the claimant by the defendant or if there has been acknowledgement of the debt
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